They wouldn't need to have an Okta CSE account for that, since anyone can go to *.okta.com and fire off a reset password email for any account. (Then again it does look like that's not available for every org. There's not a "reset password" option on cloudflare.okta.com for instance. Why give a CSE the option to do a password reset in those cases, though?)

It still sounds to me like they're saying that they could set the password on an account to anything they wanted, but not retrieve an existing password.

This would be a big red flag to anyone who's observant and realizes that their password had been changed, but plenty of people would probably simply take it in stride and reset their password thinking they'd forgotten it. Either way the horse is out of the barn.